Aussie dollar surge brings joy to travellers

dolarrTRAVELLERS heading overseas are enjoying a financial windfall as the Australian dollar defies forecasts to trade near US80c, but anyone hoping for a return to the one-for-one parity of four years ago should not hold their breath.

Economists say our dollar is much more likely to head lower from its current levels, and weaker-than-expected inflation figures released last week are adding to the downward pressure.

The Aussie rose to US$1.11 in 2011 and was still trading above US$1 in mid-2013. It then sunk to below US69c early last year but has been strong in recent months.

BetaShares chief economist David Bassanese said there was “Buckley’s” chance of a return to record highs soon.

“I see a lot more downside risk than upside risk to the Australian dollar at current levels,” he said.

“It’s definitely at the top end of its fair value range — a large part of the Aussie’s move has reflected a global trend in the US dollar weakening.”

“When the Aussie dollar was $US1.11 back in 2011 that was associated with the iron ore price going to $US191.70,” he said.

Dr Oliver said the chances of our dollar returning to parity with the US any time soon were “next to zero”.

“It could go as high as US85c in the short term … but then I think it will start to come back down again.”

Exporters, tourism operators, universities and other businesses suffer from a high Australian dollar, but overseas travellers benefit from their increased buying power.

Research by Qantas Cash has found that winter is the prime time for stocking up on foreign currencies.

“When the Australian dollar is strong they know they’re getting more bang for their buck so it’s a good time to lock in their foreign currency rates ready for their next holiday,” a Qantas spokeswoman said.

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